Exhibit 99.1
NEWS RELEASE | |
COMPUWARE CORPORATION | |
Corporate Headquarters | |
One Campus Martius · Detroit, Michigan 48226 | |
(313) 227-7300 | |
For Immediate Release | |
October 23, 2014 |
Compuware Corporation Reports Second Quarter,
Fiscal Year 2015 Results
· | Non-GAAP earnings per share were $0.09; GAAP EPS of $0.04 |
· | Total revenues were approximately $170.9M |
· | Total APM (Dynatrace) revenue was approximately $83.2M; contribution margin of 11.9 percent |
· | Total Mainframe revenue was approximately $66.0M; contribution margin of 75.9 percent |
DETROIT, October 23, 2014 -- Compuware Corporation (Nasdaq: CPWR), the technology performance company, today announced financial results for its second quarter, fiscal year 2015 ended September 30, 2014.
Non-GAAP net income for the quarter was $19.9 million, or $0.09 per diluted share, compared to $21.2 million, or $0.10 per diluted share in the year-ago period. GAAP net income for the second quarter was $9.2 million, or $0.04 per diluted share, compared to $9.1 million, or $0.04 per diluted share in the year-ago period. Prior-year amounts relate to our continuing operations.
(Included in the financial tables is a reconciliation between non-GAAP and GAAP results.)
“The second quarter was a solid period for Compuware, as we ended up ahead of projected profitability and in line with revenue expectations. We have established a market-leadership position in application performance management and continue to see great progress in stabilizing our mainframe business,” said Compuware CEO Bob Paul. “We remain extremely enthusiastic about the opportunity in front of us. The completion of the Company’s transformation into a lean and focused entity able to compete and win in today’s tech market is almost complete. Also, our recent announcement regarding the finalization of the Covisint spin marks the accomplishment of another key milestone along this path, all of which will significantly benefit customers, employees and shareholders alike.”
With regard to the sale of the Company to Thoma Bravo, Compuware plans to mail the definitive proxy statement to shareholders on or about November 4, 2014 and, subject to regulatory approval, expects the shareholder meeting seeking approval for the transaction to be held on or about December 8, 2014.
Second Quarter Fiscal Year 2015 Dynatrace Segment Results and Highlights
· | Total revenue was approximately $83.2M, up 8.9 percent y/y. |
· | Software license fees were approximately $25.9M, up 3.4 percent y/y. |
· | Maintenance fees were approximately $29.4M, up 19.5 percent y/y. |
· | Subscription fees were approximately $19.9M, flat y/y. |
· | Services fees were approximately $7.9M, up 16.6 percent y/y. |
· | Continued 90 percent+ overall maintenance renewal rate. |
· | Services on growth track due to transition from “implementation services” to “expert services.” |
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
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· | Customer satisfaction at industry best 89.9% “Net Promoter Score.” |
· | APMaaS bookings up 40 percent y/y with continued strength forecasted. |
Second Quarter Fiscal Year 2015 Mainframe Segment Results and Highlights
· | Total revenue was approximately $66.0M, down 8.1 percent y/y. |
· | Software license fees were approximately $6.3M, down 16.6 percent y/y. |
· | Maintenance fees were approximately $59.6M, down 7.2 percent y/y. |
· | Contribution margin was approximately 75.9 percent compared to 76.6 percent last year. |
· | Exceeded plan for software license bookings and revenue. |
Second Quarter Fiscal Year 2015 Company Results
During the company’s second quarter:
· | Total revenues were approximately $170.9M, down 1.0 percent y/y. |
· | Software license fees were approximately $32.2M, down 1.2 percent y/y. |
· | Maintenance fees were approximately $89.0 million, flat y/y. |
· | Subscription fees were approximately $19.9 million, flat y/y. |
· | Application services fees were approximately $21.7 million, down 11.4 percent y/y. |
Second Quarter Fiscal Year 2015 Company Highlights
During the second quarter, Compuware:
· | Entered into a definitive agreement to be acquired by leading private equity investment firm Thoma Bravo, LLC, in a transaction valued at approximately $2.5 billion. The transaction is subject to approval from Compuware's shareholders, regulatory approvals, and other customary closing conditions. The closing of the transaction is also subject to the completion of a distribution of Covisint. |
· | Appointed Christopher O'Malley President of Mainframe Operations effective July 21, 2014. In this role, O'Malley oversees all facets of the business unit’s operations, including sales and marketing, product development and management, and customer support. |
· | Announced plans to operationally separate its mainframe and APM businesses and that the resulting mainframe-dedicated company will carry the Compuware name. |
· | Announced that its market-leading APM business will operate under the name Dynatrace. |
· | Announced that the annual 2014 Compuware PERFORM Global User Conference would be held October 7 - 9 in Orlando, Florida, where the Dynatrace team would share real-world examples of how companies use APM to optimize users’ experiences online, drive profits and build business success. |
· | Announced that Gartner, Inc., named Compuware the worldwide APM market share leader for the second year in a row. |
· | Announced that SD Times Magazine has named Compuware APM (Dynatrace) to its 2014 SD Times 100 list as a leader and innovator in the “Mobile Testing, Quality Assurance, and Security” category. |
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· | Revealed that Covisint Chief Security Officer Dave Miller would deliver a presentation on cloud computing titled “The Four Immutable Laws of Cloud Computing,” at the Gartner Catalyst Conference. |
· | Stated that Covisint simplified the Physician Quality Reporting System (PQRS) for physicians and healthcare systems with its 2014 PQRS Registry. |
· | In conjunction with leading IT industry analyst firm Enterprise Management Associates, teamed up to host “A Pragmatic Approach to DevOps and the Mainframe” live webcast. |
· | Announced that Mainframe APM Subject Matter Expert Spencer Hallman and Mainframe Product Manager Tyler Allman would co-present the session, “Break Down IT Walls for Faster, More Seamless Mainframe Application Problem Resolution” at the SHARE conference in Pittsburgh. |
· | Announced that Dynatrace teamed up with Rosetta, one of the largest customer engagement and e-commerce agencies in the U.S., for a live webcast to provide tips on how retailers can avoid the most common eCommerce mistakes during the holiday shopping season and deliver superior online experiences to their customers. |
· | Announced that Perficient, a leading information technology and management consulting firm serving global 2000 and other large enterprise customers throughout North America, joined Covisint's Certified Service Partner program. |
· | Featured on the cover of Enterprise Executive with an article titled, "Compuware’s Chris O’Malley Shares His Vision of “Mainframe’s Next 50 Years.” |
· | Released the video, “Empower Your Next-Gen Mainframe Developers,” to help IT organizations overcome the significant challenges of improving the efficiency and productivity of the next generation of development and operations teams. |
Use of Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding the Company's results as determined by U.S. generally accepted accounting principles (“GAAP”), the Company has provided non-GAAP net income and non-GAAP diluted earnings per share. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. These non-GAAP financial measures exclude stock compensation expense; amortization of purchased software and acquired intangible assets; restructuring charges; advisory fees associated with certain shareholder actions and business transformation; and the related tax impacts of these items. Each of the non-GAAP adjustments is described in more detail below. The accompanying tables provides a reconciliation of each of these non-GAAP measures to its most comparable GAAP financial measure.
We believe that inclusion of these non-GAAP financial measures provides better comparability with our historical financial results and with the results of many of our competitors. In addition, we believe these non-GAAP financial measures are useful to investors because they allow investors to review supplemental information used internally by management to evaluate our financial results. These non-GAAP measures also represent the means by which we communicate our earnings guidance to investors.
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October 23, 2014
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While we believe that these non-GAAP financial measures provide useful supplemental information, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not audited, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Items such as stock compensation expense; amortization of purchased software and acquired intangible assets; restructuring charges; advisory fees associated with certain shareholder actions and business transformation; and the related tax impacts of these items that are excluded from our non-GAAP financial measures can have a material impact on net income. As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, net income or loss, cash flow from operations or other measures of performance prepared in accordance with GAAP. We compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reconciling the non-GAAP financial measures to their most comparable GAAP financial measure. We have procedures in place to ensure that these measures are calculated using the appropriate GAAP components in their entirety and to ensure that our performance is properly reflected to facilitate consistent period-to-period comparisons. Management reviews the non-GAAP adjustments on a net-of-tax basis when evaluating our performance. Therefore, we exclude the tax impact of these charges when presenting non-GAAP financial measures.
The following discusses the reconciling items from our non-GAAP financial measures to the most comparable GAAP financial measures:
Stock compensation expense. Our non-GAAP financial measures exclude the compensation charges required to be recorded by GAAP for equity awards to employees and directors. Although this is a normal recurring expense for us, we believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures excluding this expense because these costs are generally fixed at the time an award is granted, are then expensed over several years and generally cannot be changed or influenced by management in the current period.
Amortization of purchased software and acquired intangibles. Our non-GAAP financial measures exclude costs associated with the amortization of purchased software and acquired intangible assets. Although this is a normal recurring expense for us, we believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures excluding this expense because these costs are fixed at the time of acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management in the current period.
Restructuring charges. Our non-GAAP financial measures exclude restructuring charges, and any subsequent changes in estimates as they relate to our ongoing corporate restructuring activities. We believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures excluding restructuring charges in order to provide comparability and consistency with historical operating results.
Advisory fees associated with certain shareholder actions and our business transformation initiative. In response to certain shareholder actions dating back to fiscal 2013, we have taken various actions to drive shareholder value. These actions have resulted in significant consultant fees to investigate business alternatives and implement business transformation plans. We believe it is useful in evaluating corporate performance during a particular time period to review the supplemental non-GAAP financial measures excluding such costs in order to provide comparability and consistency with historical operating results.
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
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Provision for income taxes on above pre-tax non-GAAP adjustments. Our non-GAAP financial measures exclude the tax impact of the above pre-tax non-GAAP adjustments. This amount is calculated using the tax rates of each country to which these pre-tax non-GAAP adjustments relate. Management excludes the non-GAAP adjustments on a net-of-tax basis in evaluating our performance. Therefore, we exclude the tax impact of these charges when presenting non-GAAP financial measures.
Compuware is the technology performance company, and we exist solely to help our customers optimize the performance of their most important and innovative technologies—those that drive their businesses forward. Today, more than 7,100 companies, including many of the world’s largest organizations, depend on Compuware and our new-generation approach to performance management to do just that. Learn more at: http://www.compuware.com.
###
Press Contact
Lisa Elkin, Senior Vice President, Marketing, Communications and Investor Relations, +1-313-227-7345
Certain statements in this release that are not historical facts, including those regarding the Company’s future plans, objectives and expected performance, are “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. While we believe any forward-looking statements we have made are reasonable, actual results could differ materially since the statements are based on our current expectations and are subject to risks and uncertainties. These risks and uncertainties are discussed in the Company’s reports filed with the Securities and Exchange Commission. Readers are cautioned to consider these factors when relying on such forward-looking information. The Company does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
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COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
AS OF SEPTEMBER 30, | ||||||||
ASSETS | ||||||||
2014 | 2013 | |||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 255,270 | $ | 50,372 | ||||
Accounts receivable, net | 313,944 | 381,892 | ||||||
Offering proceeds receivable | - | 68,448 | ||||||
Deferred tax asset, net | 37,192 | 42,837 | ||||||
Income taxes refundable | 4,313 | 4,628 | ||||||
Prepaid expenses and other current assets | 30,892 | 33,365 | ||||||
Total current assets | 641,611 | 581,542 | ||||||
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION | 279,748 | 295,264 | ||||||
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET | 95,805 | 111,162 | ||||||
ACCOUNTS RECEIVABLE | 161,130 | 191,208 | ||||||
DEFERRED TAX ASSET, NET | 16,011 | 30,351 | ||||||
GOODWILL | 632,106 | 732,265 | ||||||
OTHER ASSETS | 23,460 | 28,688 | ||||||
TOTAL ASSETS | $ | 1,849,871 | $ | 1,970,480 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 18,947 | $ | 16,894 | ||||
Accrued expenses | 79,451 | 92,969 | ||||||
Income taxes payable | 14,998 | 18,266 | ||||||
Deferred revenue | 347,092 | 387,878 | ||||||
Total current liabilities | 460,488 | 516,007 | ||||||
LONG TERM DEBT | - | 14,000 | ||||||
DEFERRED REVENUE | 250,646 | 285,119 | ||||||
ACCRUED EXPENSES | 20,079 | 18,274 | ||||||
DEFERRED TAX LIABILITY, NET | 36,378 | 52,769 | ||||||
Total liabilities | 767,591 | 886,169 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Common stock | 2,208 | 2,157 | ||||||
Additional paid-in capital | 847,172 | 799,647 | ||||||
Retained earnings | 237,874 | 268,937 | ||||||
Accumulated other comprehensive loss | (21,635 | ) | (7,539 | ) | ||||
Total Compuware shareholders' equity | 1,065,619 | 1,063,202 | ||||||
Non-controlling interest | 16,661 | 21,109 | ||||||
Total shareholders' equity | 1,082,280 | 1,084,311 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,849,871 | $ | 1,970,480 |
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
REVENUES: | ||||||||||||||||
Software license fees | $ | 32,189 | $ | 32,591 | $ | 58,876 | $ | 64,334 | ||||||||
Maintenance fees | 89,023 | 88,819 | 177,483 | 175,981 | ||||||||||||
Subscription fees | 19,949 | 19,931 | 39,311 | 40,063 | ||||||||||||
Services fees | 7,997 | 6,827 | 16,411 | 14,498 | ||||||||||||
Application services fees | 21,735 | 24,525 | 43,322 | 48,626 | ||||||||||||
Total revenues | 170,893 | 172,693 | 335,403 | 343,502 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Cost of software license fees | 4,300 | 5,227 | 9,295 | 10,156 | ||||||||||||
Cost of maintenance fees | 5,942 | 6,846 | 12,864 | 14,185 | ||||||||||||
Cost of subscription fees | 8,506 | 8,450 | 16,708 | 16,290 | ||||||||||||
Cost of services | 6,901 | 5,892 | 13,633 | 12,534 | ||||||||||||
Cost of application services | 27,231 | 33,689 | 58,133 | 57,950 | ||||||||||||
Technology development and support | 19,615 | 21,379 | 39,567 | 45,070 | ||||||||||||
Sales and marketing | 50,976 | 47,356 | 104,079 | 99,623 | ||||||||||||
Administrative and general | 30,580 | 32,838 | 64,593 | 68,886 | ||||||||||||
Restructuring costs | 2,255 | 219 | 5,230 | 5,022 | ||||||||||||
Total operating expenses | 156,306 | 161,896 | 324,102 | 329,716 | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | 14,587 | 10,797 | 11,301 | 13,786 | ||||||||||||
OTHER INCOME (EXPENSE), NET | (935 | ) | 185 | (712 | ) | 387 | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION | 13,652 | 10,982 | 10,589 | 14,173 | ||||||||||||
INCOME TAX PROVISION | 5,275 | 3,008 | 3,568 | 1,937 | ||||||||||||
NET INCOME FROM CONTINUING OPERATIONS INCLUDING NON-CONTROLLING INTEREST | 8,377 | 7,974 | 7,021 | 12,236 | ||||||||||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | - | 7,212 | - | 12,917 | ||||||||||||
NET INCOME INCLUDING NON-CONTROLLING INTEREST | 8,377 | 15,186 | 7,021 | 25,153 | ||||||||||||
Less: Net loss attributable to the non-controlling interest in Covisint Corporation | (774 | ) | (1,154 | ) | (2,182 | ) | (1,154 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO COMPUWARE CORP | $ | 9,151 | $ | 16,340 | $ | 9,203 | $ | 26,307 | ||||||||
Amounts attributable to Compuware common shareholders | ||||||||||||||||
Income from continuing operations | 8,377 | 7,974 | 7,021 | 12,236 | ||||||||||||
Loss attributable to non-controlling interest | (774 | ) | (1,154 | ) | (2,182 | ) | (1,154 | ) | ||||||||
Income from continuing operations, net of tax | 9,151 | 9,128 | 9,203 | 13,390 | ||||||||||||
Income from discontinued operations, net of tax | - | 7,212 | - | 12,917 | ||||||||||||
Net income attributable to Compuware common shareholders | $ | 9,151 | $ | 16,340 | $ | 9,203 | $ | 26,307 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Continuing operations | 0.04 | 0.04 | 0.04 | 0.06 | ||||||||||||
Discontinued operations | - | 0.03 | - | 0.06 | ||||||||||||
Diluted earnings per share | $ | 0.04 | $ | 0.07 | $ | 0.04 | $ | 0.12 | ||||||||
Weighted-average common shares outstanding | 220,285 | 214,926 | 219,978 | 214,287 | ||||||||||||
Dilutive effect of stock awards | 3,385 | 5,503 | 3,511 | 5,720 | ||||||||||||
Total shares | 223,670 | 220,429 | 223,489 | 220,007 |
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
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COMPUWARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
SIX MONTHS ENDED | ||||||||
SEPTEMBER 30, | ||||||||
2014 | 2013 | |||||||
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: | ||||||||
Net income including non-controlling interest | $ | 7,021 | $ | 25,153 | ||||
Adjustments to reconcile net income to cash provided by operations: | ||||||||
Depreciation and amortization | 29,017 | 32,501 | ||||||
Stock award compensation | 15,277 | 25,312 | ||||||
Deferred income taxes | (861 | ) | (16,450 | ) | ||||
Other | 1,902 | 42 | ||||||
Net change in assets and liabilities, net of effects from currency fluctuations: | ||||||||
Accounts receivable | 63,202 | 33,366 | ||||||
Prepaid expenses and other assets | (2,483 | ) | 5,640 | |||||
Accounts payable and accrued expenses | (9,153 | ) | (24,180 | ) | ||||
Deferred revenue | (72,879 | ) | (58,934 | ) | ||||
Income taxes | (19,273 | ) | 4,634 | |||||
Net cash provided by operating activities | 11,770 | 27,084 | ||||||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||||||
Purchase of: | ||||||||
Property and equipment | (5,923 | ) | (5,953 | ) | ||||
Capitalized software | (14,648 | ) | (11,649 | ) | ||||
Divestiture of business units | (8,046 | ) | - | |||||
Other | - | (275 | ) | |||||
Net cash used in investing activities | (28,617 | ) | (17,877 | ) | ||||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||||||
Proceeds from borrowings | - | 37,500 | ||||||
Payments on borrowings | - | (41,500 | ) | |||||
Net proceeds from exercise of stock awards including excess tax benefits | 9,203 | 15,333 | ||||||
Employee contribution to common stock purchase plans | 617 | 1,235 | ||||||
Repurchase of common stock | (6,960 | ) | (6,415 | ) | ||||
Dividends | (27,474 | ) | (53,629 | ) | ||||
Other | - | (608 | ) | |||||
Net cash used in financing activities | (24,614 | ) | (48,084 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (3,328 | ) | (624 | ) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (44,789 | ) | (39,501 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 300,059 | 89,873 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 255,270 | $ | 50,372 |
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COMPUWARE CORPORATION AND SUBSIDIARIES
OPERATIONAL HIGHLIGHTS
(Dollar Amounts In Thousands)
QUARTER | ||||||||||||
ENDED | ||||||||||||
SEP 30, | YR - YR | |||||||||||
2014 | 2013 | % Chg | ||||||||||
Total Product Software Revenue by Geography | ||||||||||||
North America | $ | 81,835 | $ | 85,171 | (3.9 | %) | ||||||
International | 59,326 | 56,170 | 5.6 | % | ||||||||
Deferred License Fees | ||||||||||||
Current | $ | 14,569 | $ | 15,263 | (4.5 | %) | ||||||
Long-term | 7,187 | 9,426 | (23.8 | %) | ||||||||
Deferred Maintenance | ||||||||||||
Current | $ | 254,587 | $ | 294,910 | (13.7 | %) | ||||||
Long-Term | 225,372 | 251,137 | (10.3 | %) | ||||||||
Deferred Subscription | ||||||||||||
Current | $ | 42,003 | $ | 41,358 | 1.6 | % | ||||||
Long-Term | 10,112 | 7,042 | 43.6 | % | ||||||||
Deferred Services | $ | 21,867 | $ | 22,358 | (2.2 | %) | ||||||
Deferred Application Services | $ | 22,041 | $ | 31,503 | (30.0 | %) | ||||||
Other: | ||||||||||||
Total Company Headcount | 2,975 | 4,338 | (31.4 | %) | ||||||||
Total DSO (Billed) | 67.9 | 66.0 | ||||||||||
Total DSO | 165.3 | 150.7 | ||||||||||
Stock-based compensation expense | ||||||||||||
Cost of license fees | $ | - | $ | - | N/ | A | ||||||
Cost of maintenance fees | 78 | 170 | (54.1 | %) | ||||||||
Cost of subscription fees | 4 | 1 | 300.0 | % | ||||||||
Cost of services | 22 | 21 | 4.8 | % | ||||||||
Cost of application services | 1,255 | 10,020 | (87.5 | %) | ||||||||
Technology development and support | 256 | 527 | (51.4 | %) | ||||||||
Sales and marketing | 1,888 | 803 | 135.1 | % | ||||||||
Administrative and general | 2,974 | 3,253 | (8.6 | %) | ||||||||
Restructuring costs | - | - | N/ | A | ||||||||
Discontinued operations | - | 80 | (100.0 | %) | ||||||||
Total stock-based compensation expense before income taxes | $ | 6,477 | $ | 14,875 | (56.5 | %) |
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COMPUWARE CORPORATION AND SUBSIDIARIES
BUSINESS UNIT RESULTS OF OPERATIONS
(In Thousands)
Covisint | ||||||||||||||||||||
Application | Unallocated | |||||||||||||||||||
Quarter Ended: | Dynatrace | Mainframe | Services | Expenses | Total | |||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Software license fees | $ | 25,883 | $ | 6,306 | - | - | $ | 32,189 | ||||||||||||
Maintenance fees | 29,400 | 59,623 | - | - | 89,023 | |||||||||||||||
Subscription fees | 19,949 | - | - | - | 19,949 | |||||||||||||||
Services fees | 7,923 | 74 | - | - | 7,997 | |||||||||||||||
Application services fees | - | - | $ | 21,735 | - | 21,735 | ||||||||||||||
Total revenues | 83,155 | 66,003 | 21,735 | - | 170,893 | |||||||||||||||
Total operating expenses | 73,285 | 15,907 | 28,899 | 38,215 | 156,306 | |||||||||||||||
Income (loss) from operations | $ | 9,870 | $ | 50,096 | $ | (7,164 | ) | $ | (38,215 | ) | $ | 14,587 | ||||||||
Contribution margin % | 11.9 | % | 75.9 | % | (33.0 | %) | 8.5 | % | ||||||||||||
Operating expenses include: | ||||||||||||||||||||
Stock awards compensation | $ | 2,410 | $ | (31 | ) | $ | 1,255 | $ | 2,843 | $ | 6,477 | |||||||||
Amortization of purchased software | $ | 1,570 | $ | - | $ | 94 | $ | - | $ | 1,664 | ||||||||||
Amortization of other acquired intangible assets | $ | 955 | $ | - | $ | 77 | $ | - | $ | 1,032 | ||||||||||
September 30, 2013 | ||||||||||||||||||||
Software license fees | $ | 25,027 | $ | 7,564 | - | - | $ | 32,591 | ||||||||||||
Maintenance fees | 24,596 | 64,223 | - | - | 88,819 | |||||||||||||||
Subscription fees | 19,931 | - | - | - | 19,931 | |||||||||||||||
Services fees | 6,796 | 31 | - | - | 6,827 | |||||||||||||||
Application services fees | - | - | $ | 24,525 | - | 24,525 | ||||||||||||||
Total revenues | 76,350 | 71,818 | 24,525 | - | 172,693 | |||||||||||||||
Operating expenses | 69,260 | 16,821 | 34,362 | $ | 41,453 | 161,896 | ||||||||||||||
Income (loss) from operations | $ | 7,090 | $ | 54,997 | $ | (9,837 | ) | $ | (41,453 | ) | $ | 10,797 | ||||||||
Contribution margin % | 9.3 | % | 76.6 | % | (40.1 | %) | 6.3 | % | ||||||||||||
Operating expenses include: | ||||||||||||||||||||
Stock awards compensation | $ | 1,796 | $ | (315 | ) | $ | 10,020 | $ | 3,294 | $ | 14,795 | |||||||||
Amortization of purchased software | $ | 2,296 | $ | - | $ | 94 | $ | - | $ | 2,390 | ||||||||||
Amortization of other acquired intangible assets | $ | 1,707 | $ | - | $ | 96 | $ | - | $ | 1,803 |
Prior year amounts have been reclassified to reflect the transition of Dynatrace for Mainframe from the Mainframe segment to the Dynatrace segment.
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
Page 11
October 23, 2014
Page 11
COMPUWARE CORPORATION AND SUBSIDIARIES
BUSINESS UNIT RESULTS OF OPERATIONS
(In Thousands)
Covisint | ||||||||||||||||||||
Application | Unallocated | |||||||||||||||||||
Six Months Ended: | Dynatrace | Mainframe | Services | Expenses | Total | |||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Software license fees | $ | 47,270 | $ | 11,606 | - | - | $ | 58,876 | ||||||||||||
Maintenance fees | 57,695 | 119,788 | - | - | 177,483 | |||||||||||||||
Subscription fees | 39,311 | - | - | - | 39,311 | |||||||||||||||
Services fees | 16,255 | 156 | - | - | 16,411 | |||||||||||||||
Application services fees | - | - | $ | 43,322 | - | 43,322 | ||||||||||||||
Total revenues | 160,531 | 131,550 | 43,322 | - | 335,403 | |||||||||||||||
Total operating expenses | 148,918 | 33,023 | 62,291 | 79,870 | 324,102 | |||||||||||||||
Income (loss) from operations | $ | 11,613 | $ | 98,527 | $ | (18,969 | ) | $ | (79,870 | ) | $ | 11,301 | ||||||||
Contribution margin % | 7.2 | % | 74.9 | % | (43.8 | %) | 3.4 | % | ||||||||||||
Operating expenses include: | ||||||||||||||||||||
Stock awards compensation | $ | 4,322 | $ | 216 | $ | 3,874 | $ | 6,865 | $ | 15,277 | ||||||||||
Amortization of purchased software | $ | 3,190 | $ | - | $ | 188 | $ | - | $ | 3,378 | ||||||||||
Amortization of other acquired intangible assets | $ | 2,693 | $ | - | $ | 154 | $ | - | $ | 2,847 | ||||||||||
September 30, 2013 | ||||||||||||||||||||
Software license fees | $ | 48,557 | $ | 15,777 | - | - | $ | 64,334 | ||||||||||||
Maintenance fees | 48,397 | 127,584 | - | - | 175,981 | |||||||||||||||
Subscription fees | 40,063 | - | - | - | 40,063 | |||||||||||||||
Services fees | 14,398 | 100 | - | - | 14,498 | |||||||||||||||
Application services fees | - | - | $ | 48,626 | - | 48,626 | ||||||||||||||
Total revenues | 151,415 | 143,461 | 48,626 | - | 343,502 | |||||||||||||||
Operating expenses | 143,671 | 35,632 | 59,785 | $ | 90,628 | 329,716 | ||||||||||||||
Income (loss) from operations | $ | 7,744 | $ | 107,829 | $ | (11,159 | ) | $ | (90,628 | ) | $ | 13,786 | ||||||||
Contribution margin % | 5.1 | % | 75.2 | % | (22.9 | %) | 4.0 | % | ||||||||||||
Operating expenses include: | ||||||||||||||||||||
Stock awards compensation | $ | 4,619 | $ | 219 | $ | 10,506 | $ | 9,816 | $ | 25,160 | ||||||||||
Amortization of purchased software | $ | 4,573 | $ | - | $ | 188 | $ | - | $ | 4,761 | ||||||||||
Amortization of other acquired intangible assets | $ | 3,400 | $ | - | $ | 195 | $ | - | $ | 3,595 |
Compuware Corporation Reports Second Quarter, Fiscal Year 2015 Results
October 23, 2014
Page 12
October 23, 2014
Page 12
COMPUWARE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
(In Thousands, Except Per Share Data)
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
NET INCOME FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMPUWARE COPORATION | $ | 9,151 | $ | 9,128 | $ | 9,203 | $ | 13,390 | ||||||||
ADJUSTMENTS EXCLUDING IMPACT OF NON-CONTROLLING INTEREST | ||||||||||||||||
Stock compensation (excl. restructuring) | 6,260 | 12,905 | 14,564 | 21,479 | ||||||||||||
Amortization of purchased software | 1,648 | 2,389 | 3,344 | 4,759 | ||||||||||||
Amortization of acquired intangibles | 1,019 | 1,801 | 2,819 | 3,594 | ||||||||||||
Restructuring expense | 2,255 | 219 | 5,230 | 5,022 | ||||||||||||
Advisory fees | 5,351 | 1,977 | 8,095 | 3,133 | ||||||||||||
Income tax effect of above adjustments | (5,811 | ) | (7,245 | ) | (12,083 | ) | (13,738 | ) | ||||||||
Total adjustments | 10,722 | 12,046 | 21,969 | 24,249 | ||||||||||||
NON-GAAP NET INCOME FROM CONTINUING OPERATIONS | $ | 19,873 | $ | 21,174 | $ | 31,172 | $ | 37,639 | ||||||||
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS - GAAP | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.06 | ||||||||
ADJUSTMENTS EXCLUDING IMPACT OF NON-CONTROLLING INTEREST | ||||||||||||||||
Stock compensation (excl. restructuring) | 0.03 | 0.06 | 0.07 | 0.10 | ||||||||||||
Amortization of purchased software | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||
Amortization of acquired intangibles | 0.00 | 0.01 | 0.01 | 0.02 | ||||||||||||
Restructuring expense | 0.01 | 0.00 | 0.02 | 0.02 | ||||||||||||
Advisory fees | 0.02 | 0.01 | 0.04 | 0.01 | ||||||||||||
Income tax effect of above adjustments | (0.03 | ) | (0.03 | ) | (0.05 | ) | (0.06 | ) | ||||||||
Total adjustments | 0.05 | 0.05 | 0.10 | 0.11 | ||||||||||||
NON-GAAP EPS FROM CONTINUING OPERATIONS | $ | 0.09 | $ | 0.10 | $ | 0.14 | $ | 0.17 | ||||||||
Diluted shares outstanding | 223,670 | 220,429 | 223,489 | 220,007 |
EPS amounts may not add to the total due to rounding